2006 White Paper on Australian Aid

1. “We have brought the previous timetable for trade liberalisation forward significantly. We will also do it with PACER, the Pacific Agreement on Closer Economic Relations—we are embarking on a strategy to develop that…” Simon Crean, Minister for Trade, 16 September 2008 “Australia has made it clear that they are seeking to push the negotiation of a new free trade agreement forward as quickly as they can. Realistically, it is difficult for Pacific islands — many of whom are highly dependent on aid from Australia — to resist this pressure.” Department of External Trade, Solomon Islands Government, Status Update on PACER Plus (July 2009)

2. Generating shared and sustainable economic growth is the single most important objective for the Asia–Pacific region over the next ten years. The aid program will encourage growth by: • improving the policy environment for private sector growth. Initiatives include a collaborative and demand-driven Pacific land mobilisation program to explore ways to overcome the major land tenure constraints to growth in the region. • promoting trade through assistance for trade analysis, trade policy and trade facilitation, such as more efficient customs and quarantine services 2006 White Paper on Australian Aid

3. Pacific Land Program: ‘making land work’ for whom? • $54 million over four years • Difficult to implement land titling projects in Pacific but there is “an emerging consensus that a ‘middle way’ has to be found that essentially combines customary ownership with long-term leases that unlock the commercial value of land.” (White Paper 2006) • ‘Middle way’ cemented through ‘Making Land Work’ (2008) • Focus shift to building consensus on the need for land tenure reform i.e. in favour of registration and leasing of customary land • Respective governments at the ‘front’?

4. Registration/privatisation proponents Helen Hughes, CIS: • “…communal ownership of land is the primary reason for deprivation in rural Pacific communities.” (2004) • Land tenure needs to be reformed. Land surveys, registration and enforcement of private property rights are something most countries take for granted, and they need to be established in the Pacific. Land surveys are an ideal task for Australian aid since they are financially and technically demanding. (2008)

5. ANZ subm,ission (2008): The improved protection of property rights, particularly in relation to land is also needed to boost private sector investment…Without the ability to buy and sell land and establish legal title, there is little incentive to invest in long-term agricultural projects to drive productivity in the sector. It also delays infrastructure projects and makes financing decisions regarding these projects difficult. The absence of formal land titling also presents problems in the provision of finance for small business development. …. progress needs to be made to reform property rights if the general level of prosperity in PNG is to improve. The mining industry has demonstrated that sensitive land ownership issues can be managed and the sector’s approach for handling these issues could potentially be replicated across other parts of the economy.

6. Major contractors Major contractors in the lands sector include: • Coffey International an engineering company that boasts being one of the top 300 companies on the Australian Stock Exchange. It operates in over 80 countries through several “specialist companies,” with one of its listed companies dealing in international development affairs as just another related sector. • Hassal and Associates a “wholly owned subsidiary of GHD” following a merger in 2008. GHD deals with engineering and architecture, manufacturing, and resource industries such as energy, oil, gas, mining, metals, water, and geotechnical areas. • Land Equity formed in 2001 by key members of a land titling team from another company, Hatch Associates Pty ltd, formerly BHP Engineering Pty Ltd. Land Equity specialises in land titling and administration development programs. BHP Billiton is a billion dollar corporation involved heavily in mining and oil industries.

7. A new approach? • Port Moresby Declaration (March 2008): Australia is also committed to linking the economies of the Pacific island nations to Australia and New Zealand and to the world, including through pursuing a region-wide free trade agreement and enhancing other private sector development opportunities. This will help to secure a sustainable and more prosperous future for the region. • Bilateral: Pacific Partnerships for Development • Regional economic integration and growth: “the central plank of the [Australian] Government’s Pacific engagement strategy.” (Crean, 2009)

8. Australia’s Aid for trade strategy “Creating a practical alignment, coherence, between our trade policy – which unambiguously calls for the continued liberalisation of trade – and Australia’s development assistance”

9. AusAID and trade • “encourages developing countries to undertake further liberalisation, and supports objectives that help this objective” • Developing countries participation in trade agreements provides a “platform to advocate further trade liberalisation and economic reform.” • Trade agreements with developing countries relatively new “and it is early to expect to see evidence of development outcomes from them”

10. AusAID & PACER-Plus PACER-Plus Support Initiative • PiPP policy papers on trade • IIT report on benefits and challenges of PACER-Plus • Training of negotiators at IIT • Trade research initiative ($65,000 per country) • Office of Chief Trade Advisor • Support FIC participation in meetings

11. Issues/Questions • Who determines priorities • A distraction from a reciprocal free trade agreement (e.g. DFAT submission to PC) • Trade commitments binding aid commitments not (e.g. AANZFTA) • Aid focused on technical aspects re implementation and compliance